Tribe’s TIP 121 and the Future of Midas Capital

At Midas, much like others in the ecosystem, we have been closely following the debate around “TIP 121: Proposal for the future of Tribe DAO”. Midas started out as a project closely collaborating with Rari and Tribe DAO, so we believe it is critical to address the situation and clarify how these events will influence the future of Midas.

To put things into perspective, this is how the idea of Midas was formed. The team saw a strong interest forming around the idea of isolated lending in Q4 of 2021, with Rari being the thought leader in this niche idea at the time. We saw the potential of the tech and wanted to make it available on new chains.

As the core Rari contracts weren’t open-sourced, we decided to reach out to Rari and discuss a potential partnership. After coming to an initial agreement about obtaining access to the codebase deployed to the BNB chain, we began building the Midas Capital protocol. However, we quickly realized that the state of the contracts and the tooling around them wasn’t up to par with our vision of democratizing money markets.

Therefore, we decided to:

• Upgrade the entire codebase to the newest Solidity version
• Do a set of large refactors that would allow us to easily deploy code onto any EVM chain
• Build a custom SDK for third-party integrations and to power our own frontend;
• Build an entirely new testing framework using Foundry that enabled end-to-end testing of the platform, from pool creation to the liquidation of exotic assets;
• Put a large emphasis on the reliability of our off-chain infrastructure, particularly liquidation and twap bots.

While we were building the aforementioned items, the Rari-Tribe merger took place, and Tribe DAO was formed. We met with the Fei team, who also shared our excitement about what we were building. During this period of time, the energy within the DAO was monumental. There were multiple products in the pipeline that we saw as a chance to open a new chapter for DeFi.

Eventually, both Rari and Fei started work on the development of three exciting items: ERC-4626 token standard, Tribe Turbo, and Tribe Launch. And as the Convex Pool went live on mainnet, we saw the first pool to ever use the ERC-4626 functionality and were instantly sold on the potential.

Unfortunately, it was not long until the Rari hack occurred, and most of the development came to a screeching halt. Discussions around protocol development were replaced by internal struggles regarding how to properly use DAO funds in the face of adverse conditions. While we were happy to provide our thoughts and actively engage with the DAO members during this time, we remained focused on our team vision and the mission of building the Midas protocol.

In particular, we focused on ensuring scalability, as well as generalisability across chains and assets, for which novel integrations could be built. It was during this time that the major protocol and tooling upgrades were developed (and audited), which allowed us to launch, despite the internal struggles inside TribeDAO.

We’ve continued operating as an independent team, using our own engineering standards and practices. While interactions in the early stages of development certainly helped to understand how to best use the tooling developed by them, our ties are currently mostly part of DAO history.

Another thing we’d like to highlight as well to our community as a point of reckoning: our interactions with Tribe and Rari highlighted the need to operate with a completely different value proposition from what Rari initially had set for themselves. Their original goal hinged on the idea to create a fully permissionless set of tools that enables the creation of arbitrarily complex money markets — by anyone. While we found that to be a noble idea that we could have pursued in the future, we have also acknowledged that the complexities of such an approach are simply unworkable.

Instead, our approach revolves around being more intentional about the kind of partners we choose and which use cases we should support. With a B2B-oriented, SaaS-type product, we have created the necessary environment to iterate safely on complex technology before we achieve the goal of a fully permissionless system.

Regardless of the Tribe and Rari events, isolated pool-based lending markets have been our core thesis from the get-go. With the development of the Midas SDK, we are also enabling other projects to offer isolated money markets to users on their own front end, with Midas integration at the back end. To build an ecosystem of mutual growth, Midas will extensively support projects using our Midas tech to scale effectively.

As for the pools on Midas, we have integrated with major ecosystems such as BNB, Moonbeam, and Polygon, and we have received an overwhelmingly positive response, both from users and the projects whom we are partnering with. As a multichain protocol, with a top-notch development team capable of providing tailored solutions for any use-case on any EVM-compatible chain, we would like to end this article with an open invitation to any DAO on any chain that is interested in using this framework to build the next iteration of interoperable DeFi protocols.

To partner with us or ask us any questions, you can join the Midas Community on Discord.